JEDDAH: The King Abdullah Financial District is fast emerging as a centerpiece of Saudi Arabia’s economic transformation, playing a critical role in the Kingdom’s efforts to diversify and establish itself as a global hub for commerce and investment.

Located in the capital, Riyadh, KAFD is more than just a collection of striking buildings, it is a thriving financial ecosystem. 

As the base for the Saudi Stock Exchange, global investment firms, regulatory bodies, and fintech companies, the district is helping to reshape the financial landscape of the region.

KAFD aligns closely with the goals of Vision 2030, Saudi Arabia’s strategic framework for economic diversification. It supports growth in capital markets, attracts foreign direct investment, and fosters innovation in financial technologies, according to industry experts.

The scale of the development reflects its ambition. Spanning 3.2 million sq. meters of gross floor area over a 1.6 million sq. meter site, the district includes over 2,900 residential units and more than 6,100 hotel keys and serviced apartments. It also boasts Riyadh’s tallest tower — an 80-story skyscraper reaching 385 meters — and is the largest project in the world to receive the Leadership in Energy and Environmental Design ND Stage 2 Platinum certification.

KAFD’s design is the work of over 25 leading architectural and design firms, including Foster + Partners, Henning Larsen, and Gensler. Its five main asset classes — office, residential, hospitality, retail, and entertainment — combine to offer a modern, integrated environment for business and living.

Mansoor Ahmed, an independent adviser with over 25 years of regional experience in real estate and infrastructure, told Arab News that KAFD is the center of Saudi Arabia’s financial sector, attracting top institutions, asset managers, and fintech firms.

“KAFD encourages international financial firms and investors to establish operations in Riyadh, enhancing foreign capital inflows. For example, Goldman Sachs, a leading global investment bank, announced plans to open a new office in KAFD,” Ahmed said.

He added that Tadawul is expanding rapidly, and KAFD plays a key role in supporting market growth, driving liquidity, and diversifying financial products.

“Tadawul Tower, located within KAFD, serves as the headquarters of the Saudi Stock Exchange. Its presence in the district has contributed to attracting investors and businesses, thereby boosting the region’s economic growth,” he said.

More than buildings

Commenting on how KAFD is enhancing Saudi Arabia’s competitiveness as a global financial center, Tamer Al-Sayed, chief financial officer at the FII Institute, told Arab News that the district is more than just a striking skyline — it’s a statement.

“It signals Saudi Arabia’s commitment to becoming a major financial hub, offering a world-class ecosystem designed to attract global institutions, investors, and talent. What makes it competitive is its mix of cutting-edge infrastructure, financial incentives, and integration with Vision 2030’s broader economic reforms,” Al-Sayed said.

He added that, unlike traditional financial centers, KAFD is being developed in tandem with regulatory transformation. 

The King Abdullah Financial District serves as a launchpad for fintech startups, digital banking solutions, and venture capital firms.

Mansoor Ahmed, real estate adviser

“With initiatives like the Financial Sector Development Program, fintech expansion, and capital market liberalization, Saudi Arabia is reshaping its financial landscape,” the CFO said.

He emphasized that KAFD represents these reforms in physical form, hosting key regulatory bodies, financial institutions, and technology-driven firms that will lead future economic growth.

Ahmed explained that KAFD is enhancing private sector participation and foreign direct investment by enabling financial firms to offer more sophisticated investment products, which contributes to diversifying Saudi Arabia’s economy beyond oil.

He highlighted that in 2024 KAFD planned to consolidate some of its income-generating properties into a real estate investment fund and list it on Tadawul, aiming to raise around $700 million.

“This initiative not only funds additional development projects within KAFD but also revitalizes the Saudi REIT sector for investors,” Ahmed said.

The district stands as a tangible expression of Vision 2030, demonstrating the impact of public-private partnerships in advancing Saudi Arabia’s shift toward a knowledge-based economy.

Ahmed emphasized that KAFD directly supports this initiative by working to build a more resilient and diversified financial sector.

“KAFD has been pivotal in advancing Saudi Arabia’s fintech landscape. The district’s infrastructure and strategic initiatives have contributed to the growth of fintech companies, aligning with the FSDP’s goal to foster innovation and competition in the financial sector,” he said.

Ahmed further added that KAFD fosters entrepreneurship and fintech growth by hosting innovation-driven financial firms. “KAFD serves as a launchpad for fintech startups, digital banking solutions, and venture capital firms. The Ministry of Investment and KAFD have entered into an agreement to accelerate investment and entrepreneurship within the district,” he said.

In terms of job creation and talent development, he said the district acts as a catalyst for employment across finance, technology, and professional services, attracting both local and international talent.

“KAFD is expected to accommodate around 50,000 residents upon completion and provide employment opportunities for approximately 43,000 workers, significantly contributing to job creation in line with Vision 2030’s goals,” Ahmed said.

Beyond its economic role, the district has significantly boosted Riyadh’s appeal as a business and tourism destination, helping the city’s hospitality
sector thrive.

Ahmed pointed out that KAFD sets new benchmarks for commercial real estate in Riyadh by offering Grade A office spaces that cater to global demand for smart, sustainable buildings.

“KAFD is integrating various smart city solutions to create a sustainable and efficient urban environment, including smart traffic management and mobility solutions, enhancing the appeal of its commercial real estate offerings,” he said, adding that KAFD also plays a strategic role in the Kingdom’s meetings, incentives, conferences, and exhibitions sector, positioning Riyadh as a regional business tourism hub.

“KAFD’s integration of luxury residences, exclusive retail, hospitality offerings, and diverse entertainment and recreational experiences within a compact, pedestrian-friendly urban ecosystem makes it an attractive destination for business events and tourism,” the independent adviser said.

New York, London, Riyadh?

The FII Institute’s Al-Sayed outlined the key factors that will determine whether KAFD can rival the world’s top financial hubs such as New York, London, and Singapore. He stressed that such centers evolve through a combination of regulation, infrastructure, talent, and trust.

“KAFD has the foundation, but to compete with London, New York, and Dubai, it needs three critical factors. First, regulatory competitiveness as a business-friendly regulatory environment is key. The ability to offer tax incentives, ease of doing business, and a seamless legal framework will define how attractive it becomes to global players,” he said. 

What makes it competitive is its mix of cutting-edge infrastructure, financial incentives, and integration with Vision 2030’s broader economic reforms.

Tamer Al-Sayed, chief financial officer at the FII Institute

The second factor, he added, is liquidity and market depth. “Financial hubs thrive on deep, liquid markets. Expanding the Saudi stock market, facilitating foreign capital flows, and enhancing financial product diversity are essential.”

Al-Sayed identified talent and global connectivity as the third pillar. He noted that attracting top global talent and building strong international links will be decisive.

“Attracting international finance professionals while developing local talent through education and experience will be a game-changer. Additionally, enhancing global connectivity through strategic partnerships with other financial centers will solidify its position,” Al-Sayed said.

He pointed out that, just as Dubai succeeded by positioning itself as the financial gateway to the Middle East, KAFD has the potential to go even further by leveraging Saudi Arabia’s scale, resources, and long-term vision.

On foreign investment, Al-Sayed said KAFD is instrumental in shaping Saudi Arabia’s appeal to international investors.

“Traditionally, investors look for stability, accessibility, and a supportive ecosystem. KAFD provides this in a way that aligns with Vision 2030’s broader goals— diversification, digital transformation, and private-sector growth,”the CFO said.

He added that confidence in the Saudi market is key to attracting FDI.

“When global banks, asset managers, and venture capital firms establish regional headquarters at KAFD, this sends a strong signal that Saudi Arabia is open for business, not just as an oil powerhouse but as a financial and economic force,” he said.

Al-Sayed concluded that KAFD is not merely a financial center but a modern, integrated economic ecosystem.

“KAFD’s success will not be measured by the height of its towers but by the impact it has on global capital flows, business confidence, and economic diversification. The challenge is not just in building world-class infrastructure but in fostering a financial culture that can compete on a global scale,” he said.

KARACHI: Pakistan is facing a “big backlog” of export containers at its ports after international shipping lines began bypassing the country, following India’s decision to block vessels carrying Pakistani cargo, officials and shipping documents confirmed to Arab News on Friday.
The disruption has led several global shipping companies to impose emergency operational surcharges on Pakistani cargo, citing the “significant impact” of regional geopolitical tensions on their operations.
The move is expected to raise shipping costs and, ultimately, consumer prices in Pakistan, a country of over 240 million people already grappling with economic challenges.
“The European shipping services are bypassing Pakistan ports after India’s ban on the transit of ships loaded with cargoes from Pakistan,” said Syed Tahir Hussain, Secretary General of the Pakistan Ship Agents Association (PSAA).
He accused New Delhi of attempting to undermine Pakistan’s recovering economy, which has shown signs of stabilization under the International Monetary Fund’s (IMF) $7 billion loan program.
PSAA Chairman Mohammed A. Rajpar called India’s move “unwarranted” and against international conventions, saying it was designed to discourage shipping lines from calling at Pakistani ports.
The situation comes as Islamabad is attempting to break free from its boom-and-bust economic cycles by boosting exports, which rose 6 percent to $27 billion through April, according to the Pakistan Bureau of Statistics.
Until recently, many international shipping services transited Pakistani cargo through India’s largest ports — Mundra and Nhava Sheva — by loading what is termed Remaining On Board (ROB) freight.
However, India embargoed this practice last week, prompting several carriers to remove Pakistani ports from their routes and instead launch dedicated feeder services to handle trade valued at approximately $87 billion last year.
Most of Pakistan’s containerized cargo is handled through the South Asia Pakistan Terminal (SAPT) operated by CH Hutchison Holdings, Qasim International Container Terminal (QICT) run by DP World and the Karachi Gateway Terminal managed by Abu Dhabi Ports Group.
“Some vessels carrying Pakistan’s exports sailed from QICT were not allowed berthing in India,” said Hussain, whose association represents over 50 international shipping lines.
“They had to divert to Dubai and other nearby ports,” he added, without specifying when the incident occurred.
Shipping documents seen by Arab News show that at least four vessels were denied entry by Indian authorities earlier this week due to “Karachi onboard cargo.” These ships were rerouted to Colombo in Sri Lanka and Jebel Ali in the United Arab Emirates.
Swiss carrier MSC Mediterranean Shipping redirected all destination cargo via Colombo aboard its vessel MSC Positano V-JP526R, which had been scheduled to call at QICT on May 6.
This change, MSC said in a customer notice, was “due to the current geopolitical situation and restrictions on imports and exports via/from India.”
French shipping giant CMA CGM has removed Karachi from at least four of its service routes, citing the need to adjust operations to and from Pakistan.
“BIG BACKLOG” AT PORTS
Export congestion is building at Pakistani ports as hundreds of containers await shipment.
“There is big backlog,” said Khurram Mukhtar, Patron-in-Chief of the Pakistan Textile Exporters Association (PTEA).
Textiles remain Pakistan’s largest export sector, contributing $17 billion last year.
Mukhtar noted that most shipping lines were now planning to route exports through Colombo, with system updates expected by Monday.
MSC has launched a “Pakistan-Colombo Shuttle Service,” a weekly feeder vessel that will transport export containers to Sri Lanka for onward connections to global destinations.
Amid the ongoing crisis, international shipping lines have begun imposing surcharges on Pakistani exporters and importers.
CMA CGM has introduced an Emergency Operational Recovery Surcharge (EORS) of up to $800 per container for shipments to the US, Latin America and Australia, effective from May 15 through June 6.
The French firm said the surcharge was necessary to maintain service reliability and safety during this period. CMA CGM operates more than 250 routes globally with a fleet of 650 vessels.
“Pakistan’s exports are suffering,” said a senior official at one of Pakistan’s major container terminals, speaking on condition of anonymity.
“This will lead to the buildup of a huge container backlog at Pakistani ports,” the official said. “There will be issues like port demurrages. The shipping lines will be charging the consignees with detentions.”